Wireless Competition Before the iPhone

Wireless Before the AT&T iPhone in 2006

The US wireless market was far more competitive before AT&T got the iPhone exclusive and this is how the market looked with AT&T / Cingular having 27% of the market with only 60 million customers.  Verizon Wireless had 26% of the market with 59M, Sprint / Nextel 23% 52M, T-Mobile 11% 25M, Alltel 5% 11M and US Cellular 2.5% with 6M.   How is wireless competition today and how have mergers consolidated the wireless industry?

The iPhone was the start of the smartphone revolution and AT&T took a year and half to negotiate with Apple to get an exclusive on it.   Its important to look back at the history of innovation before the iPhone came on to he market.  Verizon turned down the iPhone and the rest of the telecom industry greeted Apple with skepticism over whether they could make a phone that consumers would want since they were largely a PC company.  AT&T had to respond to competitive pressure 5 years ago and was forced to negotiate with Apple not knowing how successful the iPhone was going to be.

Here is a great example of how the telecom industry would have held us back from innovation if Steve Jobs had not required YouTube and other features be added to the iPhone.  Apple had to fight with AT&T in order to get the YouTube feature added on the deck and it took a year and half to get it.  Keep in mind we also had fewer dropped calls and better network service in 2006 as well.  So when a carrier like AT&T raises the argument that they will bring innovation in a duopoly competitive market they are lying.  The only thing carriers can do is protect their turf and try and keep up with the competition of WiFi that will soon surpass the capabilities of controlled and non-scalable 4G and LTE.  They will forever be dump pipes that transmit data and we should make sure that they have zero power to raise margins and prices for the sake of technology innovation and growth.

Apple iPhone had the vision which paved the way for Google to roll out Android with T-Mobile.   I think T-Mobile was the most brilliant of the carriers taking the risk and having the vision to launch Android.  The telecom industry was skeptical of course as well but look where we are now.  Its great to see the corrupt carriers losing control over data access while at the same time seeing the growth of unlicensed wireless data access WiFi and soon to be White Spaces.  The future is not longer about charge for data but about free wireless through location based advertising to get the rest of the World using smartphones who cannot afford it.